My First Home

2020 was such a crazy year for all of us. From the deaths of idols that affected us all, to the devastating virus that shook our lives up. It's been quite the journey. But one I'll always be grateful for.

But, let's back up a bit. The back end of 2019 was an amazing time for me. I got engaged, hosted an amazing Women's Empowerment event and began having a great amount of success in my business. It was all rainbows and sunshine, so naturally I started to make plans for the future to continue the winning streak.

My fiancée made it clear that before a wedding was planned, we should be buying a new home to celebrate our union in. I was so excited! For days I explored online for more info about buying a home. I looked up classes, seminars, workshops and anything that could help me on this journey I was ready to take. I finally found a first time home buying seminar being hosted by Keller Williams.

The atmosphere was so swanky and modern, full of eager eyed people young and old, as excited as I was about taking this step. The class was great; comprehensive, informative and upbeat! The instructor went over all of the important points and things to look for when buying a home. I remember taking notes and thinking "Wow, this is a lot" lol

I wrote down everything and set out to begin the most tedious and painstaking process I had ever been a part of.

Let's break the process down into a list and timeline:

1. Start your research (6-24 months before closing).

There's never too much information to learn about buying your first home! From learning market trends, researching school districts and tax info for the area of interest and REALLY getting to know exactly what you're looking for in a home.

2. Attend a first-time home buyer class (4-12 months before closing).

These classes are not only informational, but they can even be used as a prerequisite to some grant programs. I attended a class at Southwest CDC that qualified me for both the First Front Door grant and the Philly First Home grant, both available to Philadelphia residents. It was so dope to hear about all of the programs available to those looking to buy a home who may not have much saved. The Philly First Home grant specifically allows the person applying to receive funds up to $10,000 or 6% of the price of the home. This helps A LOT with down payments or closing costs.

3. Figure out your finances (6-12 months before closing).

I personally hadn't saved very long before deciding I wanted to buy a home. Though it's a great idea to save for as long as possible before buying, it's not always realistic for some people's situations. Being prepared is so important to this process, especially if you want to be comfortable and not set yourself up for failure.

Most people will tell you that the rule of thumb is to save 3%-20% for your down payment, mostly encouraging 20% down to avoid paying mortgage insurance. Though it's a great idea to save a nice amount to use as a down payment, some people don't have a surplus of money, or someone willing to gift it to them. Some great loan programs exist that will give you an opportunity to put as little down as 3% and if you're a veteran you could even put $0 down! Pretty cool right?

Along with a down payment, it's important to think about the actual cost of moving into a home. Do you need new furniture? Are there appliances already in the home? Any immediate work that needs to be done? Again, ideally you want to save as much as possible but, let's be real, that's not always gonna happen in this step either. Budget as much as you can and buy what you need at first, because realistically, things can be replaced later down the line. Idk about you, but I live for stores like Ross, Burlington, TJ Maxx and Walmart that have really cute stuff that doesn't break the bank.

The next financial piece of the puzzle is calculating expenses that appear during the process such as home inspection and appraisal.

*Deep sigh*

These processes are necessary during the process, especially if you're using some specific loan programs. An inspection is a process that helps find possible issues and violations within the home before buying. Once an inspection is completed, you receive a report of the issues that appeared and need attention. This service can cost up to $600 or so. It helps to protect both the buyer and the lender from potential problems like electrical issues, a leaky roof or things that require special testing like radon.

An appraisal is the process by which the value of a home is determined and is based on many things such as the area the home is located in or the home's layout. The lender typically requires this to determine how much they will lend to the buyer. They will not lend more than the house is worth and if the house is for sale for more than it is worth, they sellers expect the buyers to pay the difference. This process costs around $600 as well.

And before you do ANYTHING else, you'll want to get that credit in CHECK! Some programs will accept as low as a 620 for approval, but going into buying a house with debt or low scores is a horrible idea. You set yourself back and probably will pay more interest than somebody with a good or great score. Pay as much of your debt down as possible and DON'T MAKE ANY BIG PURCHASES during your process. Your DTI (Debt to Income Ratio) is a determining factor for being pre-approved for your loan.

The final costs you'll have to worry about are closing costs. These costs include loan fees, property taxes, homeowners insurance, title fees and, depending on where you live, attorney’s fees. These can costs vary based on location and the details of the sale and your loan. It costs from 2% to 5% of a the purchase price.

The good news is a little thing called seller's assist can help you sooooooo much! The seller could be so motivated to sell the house that they offer to cover some of these costs. This means you won't have to bring as much money to the table to close and can keep some in your pockets for that giant tv you want.

4. Get pre-approved for a mortgage (4-8 months before closing).

Pre-approval means the lender will examine important documents like tax forms, W-2s, recent pay stubs, savings, retirement accounts, and debt information. They use this info to tell you exactly how big of a mortgage you qualify for.

The information obtained in a pre-approval can give you so much information about your finances and ultimately give you the thumbs up or down for a loan. You'll find out your credit score, your DTI, etc. A lender will look at these factors and decide whether lending to you is too much of a risk. It's okay to seek more than one pre-approval but not great to get too many so as not to have so many inquiries on your credit. One lender may be willing to lend you more than the other which works in your favor obviously. Once the pre-approval is done and you know how much house you can afford, it's time to get to shopping for your home!

5. Let's get it! (The house, of course)

You have your pre-approval, the price range, and all your stuff in order. Now it's time for the fun part: SHOPPINGGGGGG!

Having a great Realtor is such a breath of fresh air. Mine was so helpful and listened to all of my needs. Be clear and concise about the area you're looking in, the price you're willing to pay monthly, the layout you're looking for and the must haves you need such as a finished basement, a yard or spacious rooms! Explaining these wants/needs up front save so much time that could be wasted on properties you have no interest in.

Of course you'll be drooling over SO many properties. The spacious kitchens, the open floor concepts, the big back yards, the quiet neighborhoods; it's ALL SO EXCITING! While going on these showings, it's super important to communicate with your realtor about what you did or didn't like so they can adjust the listings they will show you.

6. Close on it!

Now, you've looked at a million houses, had a misstep or two, and you've found the perfect one! You're all flushed with excitement, anxious to move in and your mind is moving a million miles a minute! You'll make sure all your paperwork is turned in to your lender, that all the finishing touches are handled and get ready for closing!

At closing you'll fill out important forms, go over the details of the costs at closing and of course pay all the fees you owe. It'll take about an hour or two. But in the end, you'll be signed off on your home and be ready to move in!

Now, about MY actual experience... and what an experience it was! I remember looking at so many houses and though I loved a lot of them, it became quite a task choosing the right fit. Many things had changed throughout the year, most notably, Covid.

I had started my journey after the seminar by finding a First Time Home Buyer's class at the Southwest CDC. The class took place in January, and lasted about 5 hours. I learned every part of the process, even got some resources for a realtor and a lender to use. I even got a certificate that made me eligible for some grants! I scheduled my one on one financial coaching session which was a requirement as well and after learning my credit score and DTI, I was ready to get started. I found a realtor and got right to it.

But... in March of 2020, everything took a sharp turn. Covid hit like a ton of bricks and forced me to be partially out of work, which you'll learn is definitely not something that can happen while buying a home. I had looked at plenty properties and even got excited to buy one. But, as you'll learn, you must be employed and working full time. So yea... big ole rain on my parade. Of course I was super bummed and extremely frustrated.

Time went by slowly, Spring had come and gone, lot's changed in my life, including my relationship status in early May. My intentions toward moving were definitely different and it turned out that I would be doing it alone. Albeit overwhelming, I was determined to make it happen. I scratched and scraped to save, endured many emotional ups and downs and managed to deal.

A bit of sun shined on me as of August, when I got the good news that I would be able to go back to work full time. I was elated to be back on track with my process and immediately let my realtor Anna know that I was ready to start my search over. I even contacted my counselor at Southwest CDC to let her know that I was ready to do whatever else needed to get my grant. That's when the proverbial shit hit the fan, again.

"The funds for that grant have been depleted." was all that I heard in the conversation and I was flustered once again. So, as close as I was to completing my task, I got knocked down another peg. I moped about it for a while. But I had to press forward.

I spoke to Anna of course to let her know what was going on. And in true Anna fashion, she came through and saved the day. She had found me a great program through Bank of America that literally covered down payment, closing cost and would even pay for my appraisal. It was amazing. And even better, we had found a beautiful home, in an area I loved and for the price I wanted. The journey was almost over!

And yet again, a set back. Just my luck right?

We put an offer in almost immediately after the showing and were chosen within 2 days. The inspection had been done, followed by the appraisal. I anticipated my route to work, my schedule with my boys and getting to know the neighborhood better. I was so excited and nervous but ready for this long process to be over. I put the escrow deposits in, which I had ended up crowd funding, and was almost tapped out after the cost of the inspection and appraisal.

That's when I got the call... the appraisal had come back for $10,000 less than the price the home was selling for. My heart broke in half. I felt hopeless at this point, and the sellers had refused to budge. My options were to either somehow magically come up with $10,000 or terminate the sale. And of course, I chose the latter.

A few more months passed and I had found a few more places. The offers weren't chosen, or the taxes were too high, or the houses weren't what they appeared to be online. I was exhausted and didn't have the strength to do this too much longer. But that's when it happened...

It was November by this time. A house I had fallen in love with months ago had come back onto the market. I hadn't been chosen for the offer the first time but the person or people who were fell through for one reason or another. I didn't know the details but I didn't care!

I didn't even bother scheduling another showing, because I remembered everything from the first time. The beautiful floors, the updated appliances, the great tile in the bathroom, the spacious master bedroom. I needed it.

A week or so passed and my offer had been accepted. I was so excited! This was the tedious part. I scrambled for all of the required paperwork, turned in all of the documentation needed and finally made it to closing!

The long journey was finally over and I was so excited to finally be in my first home. There has been a certain feeling of satisfaction when walking through my home for the first time after closing. It was like all the trouble I went through was worth it in the end and I finally had something that I could call mine.

And I truly wish that feeling on everyone. There's nothing like it!

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